Marel Australia Pty Ltd v Buckmaster

This was an application for interlocutory relief pursuant to the principles in Norwich Pharmacal Co v Commissioners of Customs and Excise [1974] AC 133 for the respondent to provide the applicant information in an affidavit setting out his dealings with the applicant’s confidential information. The respondent was a former employee of the applicant who was found to have disclosed confidential information owned by the applicant to third party competitors, and he had made statements to similar effect. In resisting the order, the respondent claimed privilege against self-incrimination. His Honour disallowed the claim, as the respondent’s admissions to providing the confidential information to third parties meant that requiring him to disclose the information sought to the applicant would not expose him to any greater risk of a penalty, nor did the applicant seek any penalties to be applied to the respondent. The interlocutory relief sought by the applicant was granted.

Martin SJA

19 September 2024

Background

The applicant, Marel Australia Pty Ltd (“Marel”) employed the respondent as an industry sales manager. The respondent’s contract of employment contained provisions stating that he was required to comply with Marel’s policies about Marel’s confidential information. Relevantly, cl 18.1 of the contract provided that the respondent agreed that during his employment and after the termination of his employment, he would not use or disclose to anyone any confidential information of Marel. The respondent resigned from his role in January 2024, and Marel subsequently discovered that the respondent intended to work for a competitor. [2]–[4], [10].

Marel claimed that it discovered that the respondent had attempted to access and transfer confidential information to his new employer, and that he had accessed confidential information in December 2023 and January 2024 before he gave notice of his resignation. The respondent subsequently signed an undertaking in which he undertook to comply with his obligations with respect to Marel’s confidential information, that he deliver up any device containing information which belonged to Marel, and that he had provided full disclosure to Marel of all information which he had downloaded or extracted from Marel’s systems. [5], [13], [15].

Marel did not accept that the respondent provided full disclosure and instead contended that the respondent had taken its confidential information, the whereabouts of which remained unknown. Marel sought interlocutory orders requiring the respondent to provide an affidavit setting out his dealings with Marel’s confidential information. Marel also sought final orders pursuant to Norwich Pharmacal Co v Commissioners of Customs and Excise [1974] AC 133 (“Norwich”) and Computershare Ltd v Perpetual Registrars Ltd (2000) 1 VR 626 (“Computershare”) seeking that the respondent deliver up documents containing Marel’s confidential information in his possession or control, that he delete any electronic documents containing Marel’s confidential information, and that he be restrained from disclosing such information. [6], [17], [19]–[20].

Norwich order

Martin SJA referred to the fourfold test adopted in Stanford Asset Holdings Ltd v AfrAsia Bank Ltd [2024] 1 WLR 1118 for the making of a Norwich order:

“(a)The applicant has to demonstrate a good arguable case that a form of legally recognised wrong has been committed against them by a person (the Arguable Wrong Condition).

(b)The respondent to the application must be mixed up in so as to have facilitated the wrongdoing (the Mixed Up In Condition).

(c)The respondent to the application must be able, or likely to be able, to provide the information or documents necessary to enable the ultimate wrongdoer to be pursued (the Possession Condition).

(d)Requiring disclosure from the respondent is an appropriate and proportionate response in all the circumstances of the case, bearing in mind the exceptional but flexible nature of the jurisdiction (the Overall Justice Condition).” [36].

His Honour considered that the person who satisfies the Arguable Wrong Condition need not be the same person who satisfies the Mixed Up In Condition such that the fact that those persons are not the same does not preclude a Norwich order being granted. Having reviewed the authorities, his Honour also decided to follow Computershare and considered that a Norwich order can be granted not only in relation to the discovery of the identity of a wrongdoer, but also in relation to the discovery of information about wrongs allegedly committed. [33]–[34], [36]–[38].

The respondent contended that he returned all the relevant information but there was evidence which cast doubt on those claims. That evidence demonstrated that folders containing confidential information on a particular laptop had been accessed and copied, some of which was sent to his new employer inconsistently with his contractual obligations. Accordingly, Martin SJA was satisfied that Marel had provided sufficient evidence of wrongful use of confidential information, that there is information known exclusively to the respondent as to what confidential information was used and how, and that third parties potentially had access to that information. [40], [42], [45], [47].

Self-incrimination privilege claim

The respondent resisted providing the information sought by Marel by claiming privilege against self-incrimination. In an affidavit of his solicitor, the respondent claimed that deposing to the matters requested may expose him to civil penalties under the Corporations Act 2001 (Cth) or otherwise incriminate him or expose him to civil penalty. [49].

His Honour referred to the statement in Deputy Commissioner of Taxation v Shi (2021) 273 CLR 235, 252 [30] that:

“the mere statement by the relevant person that they believe that disclosure of information will tend to incriminate them will rarely be sufficient to protect them from complying with the disclosure order, and it will not do so when other circumstances are such as to induce the court to believe that disclosure of that information will not really have that tendency.” [52].

His Honour considered that it is uncontroversial that there is a requirement that a person claiming privilege must do more than merely state a belief that disclosure of information will tend to incriminate, and that “[a] remote or slight possibility of legal peril to a witness may not, in a particular case, be sufficient to invoke the privilege …”: Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412, 422. [53]–[55].

In its application, Marel did not seek relief based on an allegation that the respondent improperly used confidential information to gain an advantage or cause a detriment to Marel, nor did it allege that there had been a breach of the Corporations Act 2001 (Cth). Martin SJA considered that nothing was said in the solicitor’s affidavit which would support a view that deposing to the matters requested by Marel would expose the respondent to some form of criminal sanction or civil penalty. That is particularly so given that only ASIC could seek a civil penalty order, and there was nothing to support a conclusion that ASIC had any interest in the proceedings. Therefore, his Honour’s view was that the statement in the solicitor’s affidavit was “nothing more than a mere statement … that [the respondent] is concerned that he might be exposed to a Corporations Act penalty.” [56]–[61].

Additionally, his Honour considered that “a real and appreciable risk” of incrimination does not exist if a person’s prior statements have already exposed them to a risk of being pursued for a penalty “where giving answers will not lead to any increase in jeopardy to which the witness is already exposed”: Sadie Ville Pty Ltd v Deloitte Touche Tohmatsu (No 3) (2018) 357 ALR 695, 718 [101]. The respondent had made statements in which he admitted to copying from a laptop a number of documents belonging to Marel and providing those documents to third parties. Accordingly, in his Honour’s view, this meant that anything that the respondent would say in response to an order made in accordance with the relief sought “would not expose him to any greater risk than presently exists” such that the information sought would not be in breach of privilege. [63]–[68].

Disposition

Martin SJA granted the interlocutory relief sought. Namely, the respondent was ordered to provide an affidavit stating, inter alia, who he had disclosed Marel’s confidential information to and the content of that information. He was also restrained from disclosing any such information to third parties until the hearing and determination of the originating application, with the costs of interlocutory relief reserved. [69].

The Court awarded damages to the plaintiff, as assessed against the Council, of $590,801.57. [150].

A Lukacs